14th Apr 2016 07:22
LONDON (Alliance News) - Epwin Group PLC said Thursday its pretax profit was flat on last year as the challenges within the repair, maintenance and improvement market hit performance and looked set to continue into the short to medium term.
The building products manufacturer said revenue fell 1.3% to GBP256.0 million in the year ended December 31 from GBP259.5 million a year earlier, but said its pretax profit was flat at GBP18.5 million as cost of sales fell to GBP178.6 million from GBP186.7 million.
Despite this, Epwin hiked its full year dividend by 50% to 6.37 pence from 4.24p, in line with its dividend policy.
Epwin said its growth had been halted by the challenging repair, maintenance and improvement market in 2015, which drove down its fabrication and distribution revenue to GBP109.4 million from GBP116.6 million.
This division also suffered from operational challenges, namely "the impact of the door factory move in 2014", which "delayed efficiency improvement".
However, Epwin said revenue grew 2.6% in its extrusion and moulding business to GBP146.6 million, on the back of more sales of its cellular profile and rainwater products. Both trade and specification sales were up during the year.
Epwin noted it made two acquisitions during 2015, of wood plastic manufacturer Vannplastic Ltd in October and glass reinforced plastic supplier Stormking Plastics Ltd in December, which have given it a strong platform from which to build its scale, with the outlook for both positive.
However, Epwin said in the short to medium term, its profits could continue to be hit by the RMI market.
"Fundamentally, the long-term drivers of the RMI market remain positive. In the short to medium term, the outlook is less predictable and in February 2016 the UK Construction Industry fell to a ten-month low. In new build, the number of new house registrations increased by 8.0% in 2015, according to NHBC, although there was some slowing in the rate of growth in the latter part of the year," Chief Executive Jonathan Bednall said.
"Although the new build market is also impacted by general consumer confidence, it is still likely to grow due to the fundamental mismatch between supply and demand," Bednall added.
Epwin added it was currently trading in line with expectations.
Shares in Epwin were down 9.4% at 127.10 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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